Whether statement recorded in a survey has some evidentiary value as statement recorded in search?

Respected Members

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Short note of today's case law for quick reference:

[2024] 120 ITR (Trib) 486 (Jaipur) A – Bench

Assistant Commissioner of Income Tax

V.

Naresh Jain

(And vice versa)

Sandeep Gosain (JM) & Dr. Mitha Lal Meena (AM)

05.08.2024

Playlist: 131, 133A, Statement

A.Y: 2016-17/Assessee

1. A survey was conducted on assessee & explanation & acceptance of some cash payments not recorded in books was recorded on oath u/s 131.

2. Albeit the alleged admission was retracted by filing an affidavit within 2 months from the survey.

3. Additions were made solely on the basis of statement of assessee during survey.

4. On appeals it was held that:

5. No blind reliance could be placed on the assessee’s statement alleging admission since no addition could be made based solely on the statement.

6. Admittedly, no evidence was found, nor relied upon, by the revenue to support the allegation that the entire purchase consideration and the expenses incurred on the land were paid by the assessee.

7. Though the assessee had admitted that it was a cash payment not recorded anywhere in the accounts, no evidence in support of statement was found and that such things usually happen for want of availability of record and in the moments of tension.

8. The statue has provided different provisions with respect to recording of statement during survey operation with or without administering oath, u/s 132(4) in search cases, 133A(3)(iii) in survey case and 131 for general inquiry of the Income Tax Act, 1961.

9. No doubt, these provisions operate independently in their respective fields and cannot be used interchangeably (unless specifically provided so in the statute).

10. Section 133A is separate and independent from 131 as evident from the statute.

11. Section 133A(6) refers to use of the powers u/s 131 only in a given fact situation, which manifests the legislative intention that statement of the assessee can be recorded under any of these three provisions as the situation may demand.

12. Further section 132(4), provides that such statement recorded during search may be used as evidence against the assessee in any proceedings, which is not the situation with section 133A(3)(iii) or with section 131.

13. In other words, though the statement may be recorded on oath u/s 131, the statute not having provided for the use of such statement as evidence against the assessee in any proceedings, the statement recorded under these two provisions loses its evidentiary value on the strict interpretation of the fiscal statute.

14. Ignoring this significant difference will render the use of these words intendedly u/s 132(4) purposeless or nugatory.

15. Therefore, to say that a statement recorded u/s 133A(3)(iii) or even u/s 133A(6), read with section 131, is equivalent to a statement recorded u/s 132(4) to be used as evidence against the assessee, is a gross misinterpretation of the provisions.